Tanduay sales up, but profits down due to fire

Posted at 02/02/2011 2:04 AM | Updated as of 02/02/2011 11:24 AM

MANILA, Philippines - Lucio C. Tan-led liquor producer Tanduay Holdings, Inc. said yesterday profits went down by 11% to P508 million last year due to damage caused by fire that hit its Laguna factory last October.
This was despite a 15% hike in net sales based on unaudited accounts, the company president told reporters.

“Our sales volume increased by 7% from 17.9 million cases to 19.2 million,” Wilson T. Young, president and chief of operations of Tanduay Holdings, said at the sidelines of Victorias Milling Co., Inc.’s stockholders’ meeting in Makati on Feb. 1.

“This was mostly due to higher sales in the south market and the good price of sugar,” he told reporters.

Last November, company executives said they expected a 10% volume growth at most for 2010 given higher consumer spending in rural areas in the Visayas and Mindanao.

But the firm incurred a P228-million loss due to the fire, an official said last November. Tanduay Holdings moved its plant to Cabuyao, Laguna from Quiapo early last year. It also has production facilities in Cagayan de Oro and Misamis Oriental.

Tanduay Holdings holds about 95% of the alcohol market in the Visayas and Mindanao, which account for 47% and 38% of sales, respectively.

Net sales of the world’s second-largest rhum producer hit P11.8 billion in 2010, up by 15% from the previous year’s P10.2 billion, Mr. Young said. Cost of sales rose by 9% to P9.1 billion from P8.3 billion in the previous year.

In a phone interview, Mr. Young said the company expects at least a 5% growth this year. “We haven’t finished the financial statement so we cannot really state anything specific yet,” the company president said.

Mr. Young pointed to growth in the mining and sugar sectors in the south. Good sugar prices and the influx of remittances from overseas Filipino workers will also boost sales for 2011, he added.

Shares in Tanduay Holdings, which controls Tanduay Distillers, Inc. and Tanduay Brands International, Inc., were last traded on Jan. 28 at P3.30 apiece.